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Comment by acchow | Hacker News Reader

"I have all this nice stuff, so obviously I was able to afford it. And because I was able to afford it, it's not a problem that I have it. Nothing to worry about."

Did they just make this up? What proportion of people actually think like this?

I think normally you look at your salary (or bank balance) to see how "rich" you are.

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I think there are a lot of people like that. I've visited homes of plenty of acquaintances that, based on their jobs, earn less money than me, but live a much more luxurious life - for example, a 2700 square foot 4 bedroom 5 bath home, $5000 viking stove (how do I know it was a $5K stove? They were sure to let me know: "Gosh, $5,000 for this stove and it still burns the eggs!"), BMW car for him, BMW SUV for her, private school for the kids (despite paying a premium to live in a desirable public school district). It's possible that they have some alternate source of income, but still I wonder how they can afford all of that luxury.

I think there are more people that look at the equity in their home to see how rich they are than look in their bank account.

I think what has happened is that post war we have defined success as having it better than our parents. Which isn't necessarily incorrect, though ways of measuring that can be. Starting in the '80s people have been making a lot of money in things like real estate and the stock market, while the price of access to opportunities like education and job markets have increased. If you weren't part of the former group, you have essentially been left behind.

At the same time wealth, or inequity, isn't something a lot of people talk about openly. So you are left either accepting your place in the world or you can pretend that you have success by going into debt and hoping for the best. That is that the market continues to be on your side. Some people might even think this is the normal thing to do, not realizing other people have family wealth. Some people realize what is going on, but thinks that it is worth trying anyway. Or they could be those people with family wealth.

This was something that surprised me too. Looking at how someone lived and expecting them to be wealthy, only to find out later that they had no savings for retirement, and selling off property to get out from under leases or mortgages.

Who's really the sucker when they can just keep counting on forever increasing real-estate valuations? Even in the 2008 collapse, banks got bailouts and the market today is just as ridiculous as it was pre-2008.[1] "Too big to fail." The cars, the private school, they're nothing but a couple years of home appreciation with a generous tax writeoff discount. Free money, no work required. Houses in the middle of the desert and homes that have burned to the ground, are worth more than a garage full of Ferraris these days.

Savers are stupidly working hard and socking away meager sums rather than hopping on the housing gravy train.

[1] https://www.washingtonpost.com/news/politics/wp/2017/06/20/f...

I think normally you look at your salary (or bank balance) to see how "rich" you are.

Nnnnnooope. Live in a McMansion, Land Rover in the driveway, you have arrived. Ignore the part about how you made the minimum down payment (in fact, you got another loan to make the down payment on the house) on those items, and your credit cards are maxed to pay for the home theater and new dining set. You are livin' large!

I've seen it with my own eyes, including a family member. They think they're rich, when they don't have a pot that they own outright to piss in.

“Big hat no cattle”

That phrase is going into my verbal toolkit.

This is a forum for people who are mostly (software) engineers. People who are mathy and-- forgive the unfortunate generalization-- unflashy.

Founders aren't the only people who's motto is sometimes fake it until you make it. A lot of times people are doing a lot worse than would appear on the surface. They may believe looking well off helps them to be successful. And when things go wrong they see themselves as victims. Who knew my company would have layoffs? How could I anticipate declining property values.. etc.

Lots of people think like this. During the housing crash there were lots of news reports about people earning mid six-figures losing their homes because they went out of their way to buy extravagant mansions they could barely afford, rather than a more modest-sized luxury home they could have paid for outright in a year or two.

Even more of those hundred-thousandaires bought condos that they couldn't afford. We ended up with over-built areas like Chicago's Loop and Miami, because so many of them got exposed when it all nearly imploded. (All of it probably would have imploded without the bailouts.)

Oh lots of people do! Since I'm a fairly analytic person, it's batshit crazy to me.

"If someone is willing to lend me money (at any interest rate) to buy it, I can afford it."

Prior to the 2008 collapse, the San Diego Union Tribune ran a map of the county colored by the average percentage of household income spent on housing. The entire coastline was 80+% — and that included places like La Jolla with houses well into the millions, where you had these high-income couples who were living paycheck to paycheck, financing or even leasing everything to keep the affluent image and praying that the real estate market would continue rising to bail them out.

Actually this is not a surprise, most of the people feel rich based on what materials they poses and what they can afford to buy even on the loan. It does not matter what money they have in bank. Very recent famous example of this would be 50 cent.

It’s very well understood that 50 filed for bankruptcy as a strategic move, and a giant FU to an ex who tried to sue him, only to get nothing because of his “bankruptcy.” He even flat out says it in multiple interviews.

https://www.google.com/amp/s/mobile.reuters.com/article/amp/...

A lot of people look at the equity of their homes, unfortunately. Consumer spending has been steadily increasing in Sweden during the past decade in spite of salary stagnation. This sadly means the restaurants, novelty stores, coffee shops and what not that have plopped up in downtown areas are not here to stay.

What has happened during the past decade is that the real estate prices have increased by a lot and Sweden is among the most indebted populations in the world.

Firstly, in the nicest possible way, have you tested that belief against evidence? Because it is very easy to socialise with an unusual peer group and get weird anecdotes on this particular subject.

Secondly, there are unarguably some people who think like this and by their nature, they make up a disproportionate fraction of both borrowing, consumer spending and hence potentially business activity. Wise to keep an eye on them.

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